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FAQs

What is LIBOR?

The LIBOR – or London Interbank Offered Rate – is a standard interest rate, used as the benchmark for calculating further rates on a range of loans across the globe. It’s calculated daily by the Intercontinental Exchange (ICE), which asks a range of banks for the interest rates they’d charge each other for a short-term loan. It then takes the average of these, which forms the daily LIBOR figure.

This is calculated in five currencies – the US dollar, euro, British pound, Japanese yen and Swiss Franc – and for a range of different lengths of loan. There are therefore 35 different LIBOR figures posted each day, which are used by financial companies around the world to calculate their own rates.

What is an interest rate derivative?

An interest rate derivative is a financial derivative product (in the case of IG, a CFD) whose value is determined by the movement in a particular interest rate.

CFDs are a leveraged product and can result in losses that exceed deposits. You do not own or have any interest in the underlying asset. Please consider the Margin Trading Product Disclosure Statement (PDS) before entering into any CFD transaction with us.

The value of shares and ETFs bought through an IG share trading account can fall as well as rise, which could mean getting back less than you originally put in.

Please ensure you fully understand the risks and take care to manage your exposure.

IG does not issues advice, recommendations or opinion in relation to acquiring, holding or disposing of our products. IG is not a financial advisor and all services are provided on an execution only basis.

The information on this site is not directed at residents of the United States or any particular country outside Australia or New Zealand and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.